Senior Israeli officials are accusing both the left and right wing of sabotaging the Netanyahu government's relations with the US by leaking details of building plans in east Jerusalem.

As Mr Netanyahu was going to his meeting with President Obama on Tuesday, Israeli websites broke the story that the Jerusalem municipal planning council had given the final authorisation for a new building project on the site of the Shepherd's Hotel in Sheikh Jarrah in east Jerusalem.

Last year, the Obama administration condemned this building plan in what was the first diplomatic spat between the two new administrations.

The Americans have demanded clarifications of the plans, and Israeli government officials are claiming that the decision had been taken a week earlier and that the timing of the report was designed to sabotage the meeting at the White House.

Environment Minister Gilad Arden said that "the report is spin by the left-wing, some ridiculous detail that the left has unearthed to damage Netanyahu and our relations with the US. The Americans know that this is not an issue."

Yariv Openheimer, Secretary General of Peace Now, which had been quick to condemn the Sheikh Jarrah project and demonstrate outside Jerusalem City Hall, responded on IDF Radio that "the blame is Netanyahu's and his government who insist on continuing to build despite the situation."

Two weeks ago, the visit to Jerusalem by Vice President Joe Biden was disrupted by an announcement from the Interior Ministry of the authorization to build 1600 new homes in the Ramat Shlomo neighbourhood. At the time, Eli Yishai, the right-wing interior minister who opposes any freeze in east Jerusalem, was blamed by Mr Netanyahu's aides for timing the announcement to embarrass the prime minister during the crucial visit.

Both the Interior Ministry and Jerusalem City Hall have agreed to a suspension of meetings on building in east Jerusalem but there are already dozens of projects in the pipeline and government officials are concerned that there will always be ways for Mr Netanyahu's rivals from either side of the political spectrum to disrupt his efforts to repair relations with the Obama administration.